British Pound (GBP) Latest: Attempting to Stabilize After Huge Losses
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GBP price, news and analysis:
- Sterling is showing early signs of steadying near-term in early European business Thursday.
- That suggests tentative signs of, at least, a pause in its sharp decline caused by coronavirus fears and a market-wide dash to cash despite emergency stimulus measures in many major countries.
GBP showing early signs of stabilizing
Sterling is steadying in early European trading Thursday after its huge selloff as investors move into cash and the US Dollar in a market panic caused by concerns about the economic impact of the coronavirus pandemic despite emergency stimulus measures by central banks in the US, the Eurozone, Japan, Australia and elsewhere to provide emergency funds to the markets.
Even with stocks, Government bonds, gold, oil and other commodities all under strong downward pressure, the British Pound has underperformed. However, as the chart below shows, it has so far stayed above its 2019 lows against a basket of other currencies.
Bank of England Sterling Effective Exchange Rate Index (January 2, 2015 – March 19, 2020)
Source: BoE (You can click on it for a larger image)
Sterling’s relative stability can be seen in the chart below of GBP/USD, which seems to have found a near-term floor around 1.1550 after breaking below a channel support line in place since early March.
GBP/USD Price Chart, Two-Hour Timeframe (March 9-19, 2020)
Chart by IG (You can click on it for a larger image)
Whether Sterling will now rally from the lows is an open question but, as global central bank stimulus provides temporary relief from the heavy selling of recent days, its pause for breath perhaps provides a ray of hope amidst the gloom.
We look at Sterling regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.